Personal Auto Policy Uninsured Motorists (PAP) Part C

3.15 UIM & UMPD

Most drivers on the road have car insurance. However, many people only carry state minimums. That's where Underinsured Motorist Coverage comes in. Underinsured Motorists Coverage (UIM) Underinsured Motorists coverage, also known as UIM, pays the difference between the insured's actual damages for bodily injury and the amount of liability insurance carried by the driver who was at fault, up to the limits of the insured's underinsured motorists coverage. The financial responsibility limits carried by some drivers often falls far short of fully reimbursing the insured for a loss. Underinsured motorists coverage fills this gap. Underinsured Motorists Coverage varies by state. Uninsured Motorists Property Damage Coverage (UMPD) Uninsured Motorist Property Damage (UMPD) covers your insured vehicle when it is damaged by a driver who doesn't have auto insurance (uninsured). The requirement for this coverage varies by state. UMPD pays for damage to your vehicle when hit by an uninsured driver. ○ There is usually a deductible for this coverage ○ If the insured has both Collision and UMPD, they may choose which coverage to use as primary

How are limits applied

Similar to liability coverage, UM coverage limits are applied: • Per Person / Per Accident (Split Limits); or, • As a Single Limit (CSL) • Aggregate Limits - Limits coverage for all losses during the policy period to the specified aggregate limit. Aggregate limits is typically not used in personal lines but it may be helpful to be familiar with the terminology. NOTE that UM coverage CANNOT be higher that your own liability limit.

WHY

Uninsured Drivers are Everywhere How common do you think it is to have uninsured drivers on the road? According to a recent study, 12.6% percent of motorists, or about one in eight drivers are uninsured! Some states have rates upwards of 20%. So, although you may do the right thing and carry appropriate insurance, the risk of being involved in an accident with an uninsured motorist is quite high.

WHO

Uninsured Motorists / Underinsured Motorists The auto policy provides coverage to: • Named insured(s); • Resident family members; and, Passengers in the vehicle

WHAT

Uninsured Motorists Coverage Uninsured motorist coverage may either be optional or mandatory, depending on the state requirements. This is a liability coverage that is purchased on your own auto policy to cover you and your passengers in the event you are hit by another negligent driver that has no auto insurance coverage. This includes being hit in a hit and run accident where the other driver is not able to be identified. Coverage applies when "hit" and covers: • Injury expenses that should have been collected from the at-fault driver but they have no insurance. • Pain and suffering may also be claimed NOTE: 1. Vehicle damage is NOT covered as this would be covered under Part D: Collision The term 'phantom vehicle' is used to describe situations where the insured's vehicle is not hit but they are claiming that another vehicle who left the scene caused the crash. A 'phantom vehicle' accident may not be covered by UM.